An Interview with Watts Humphrey, Part 5: Early Projects at IBM

In this transcript of an oral history, Grady Booch interviews SEI Fellow Watts Humphrey. In part 5, Humphrey discusses his early years at IBM in the 1960s, where he built the first automated system for the New York Stock Exchange ticker system and the FAA's air traffic control system, which are still in use today.

From the author of

The Brokerage Studies at IBM

Booch: So tell me about the things you
did and what were you assigned to do [at IBM], because I know you got the title
later on of Director of Programming, but was that your initial title or is that
something that you came into?

Humphrey: I came into that
later. There’s a couple of interesting stories that led to that. The first job
I had, they put me in charge of the brokerage industry studies in the Advanced
System Development Division andI basically had to
build a group. We didn’t have anybody. They gave me a group that was doing some
work on the stock exchange. And so I remember first day I got the job, I got a
hold of the branch office manager at Number 1 Broadway who ran the brokerage
office, went down to see him. His name was Buck Rogers, a wonderful guy. He
later became a VP of IBM. A marvelous fellow.

Booch: How can you go wrong with a name
like Buck Rogers?

Humphrey: I think that’s true,
but in any event I went and talked to Buck. He took me over to see some people
at Merrill Lynch. He said, “That’s where we want to work.” I went and chatted
with them, and I went back up and talked to the management team, and we got a
meeting together because I wanted to start to work with Merrill Lynch. So we
got together a meeting with the division president and all the other top people,
and I presented what I wanted to do, and so everybody said, “That sounds
great.” So I left the meeting, sounded like I had an okay. I called the branch
office. I said, “Let’s go down and talk to them.”

So I went over and
talked to Merrill Lynch, and that afternoon we had an agreement that we were
going to put together and do a joint study. So they basically agreed on it, and
we agreed generally how we were going to do it. We just had to put together the
documents. So I got back and told the management team. They were horrified. They
said, “You can’t do that.” I said, “Why not? If everybody agrees we can do it.”
They said, “But you got to go through and get an approval from the lawyers and
everybody.” I said, “Let’s do that, okay? That’s fine.” But,
enough. So in any event we just went ahead and did it, and that’s one of
the things that I learned way back at Sylvania
before that, and that is that the old Jesuit theory: It’s better to ask
forgiveness than approval.

Booch: I’m curious. Did you grow up Catholic?
We hadn’t talked about that side of it. You mentioned--

Humphrey: Oh, no. I grew up
agnostic. My dad was an agnostic. I did, in fact, become a Catholic a couple of
years ago after all these years, after seven kids brought up in the Catholic church and my wife a lifelong Catholic.

Booch: Very good.

Humphrey: My step mother was
also Catholic, but we didn’t go to church at all and it’s just something I
ultimately decided to do. There’s probably not time to go into that, but I am
now a Catholic. And I am a lector and a Eucharistic minister and all that sort
of thing, so it’s great.

Booch: Marvelous, marvelous.

Humphrey: But in any event, I
started off in the brokerage industry and we actually put together the first
automated system for the New York Stock Exchange ticker system and their floor
trading system. We put together a proposal for Merrill Lynch on how they could
make an electronic trading network. We also worked with Bache and Thomson
McKinnon and we had a bunch of others that we were talking to. We were
designing a system to work with them and to help run electronic trading,
basically automate the way they did it, pretty much what they’ve ended up
doing.

I remember at one
point during this point they had a meeting with the board of governors of the
New York Stock Exchange in Poughkeepsie,
and they asked me to come give them a talk. And at this time the biggest market
trading day they had, as I recall, was in 1928; like, 20 million shares or
something like that, 19 million shares that day. A typical trading day in those
days was three million shares of stock, and so when I gave my talk to the New
York Stock Exchange board of governors, I talked about trends and that sort of
thing and I basically started by saying, “How would you handle a 100 million
share day?” That kind of blew their minds. They’d never thought about a 100
million share day, but I presented enough evidence to show them that it was
going to happen.

In fact, it happened
before a whole lot longer. We’re running about 2 to 3 billion share days now.
So it’s way up. They later told me the stock exchange people changed their
whole perception and all of a sudden they began to think you had to go
electronic.

Booch: Because back then the trade reconciliation
was still largely done by humans, was it not?

Humphrey: It was all by hand.

Booch: This reminds me then of the
story of what became the Depository Trust Corporation. Were they in the picture
here around this time, too?

Humphrey: I didn’t have any
involvement with them at all. All of the brokerage firms, they had their own
secure lock up systems for all the certificates and stuff, because they still
had certificates, and everything was done with paper and all that sort of
thing. And so basically all the brokerage houses had that -- essentially a lock
up secure area where they kept all that stuff, so that’s what we did there. And
when I was running the brokerage industry stuff, IBM was at this time designing
the 360 system and that sort of thing. Let
me step back. I guess we just moved to a house on-- #10 Barron Circle.

The FAA Bid

Humphrey: It’s the six bedroom
house that we bought and it was about 1963. I got a call one day. This is the
day before Thanksgiving in November of ’63 that there was a meeting with
[IBM’s] Vin Learson Friday morning in his office at Yorktown. IBM was moving its headquarters over to Armonk,
and they had temporary headquarters in Yorktown,
and he wanted me there at 9:00 A.M. on Friday. Well, this is a day off, of
course, the day after Thanksgiving. I didn’t argue about that and I said,
“Okay.” His secretary wouldn’t tell me anything about the meeting, so I just
arrived in Yorktown, got to his office, and
there were two other gentlemen there.

There was the
president of the marketing division, Frank Cary, and the president of the
Systems Development Division, George Kennard, and me and Learson.
And so they explained that they had gotten the bid request from the FAA for an
air traffic control system, and they wanted me to take charge of the proposal
effort. The development team had put together their approach for how to do the
job, and the development division president, a VP under him, had put this
together. A fellow named Bob Evans. And the marketing division guy, the Federal
Region, fellow named Ralph Pfeiffer, his team had put together a proposal from
the marketing people as to what they ought to do, and they were at loggerheads.
They could not agree. At this point my whole brokerage group and half of the
ASDD crowd had all been moved over to the marketing division.

So I was in a very
strange position. I was a development engineer with all this computer
background and stuff in the marketing division. And so they had scouted around
to find who they could put in charge of fixing this problem and getting these
things resolved, and they’d landed on me. So I was pulled from way down in
obscurity somewhere, and I’m sure my contact with Tom Watson really didn’t hurt
at all. So contacts don’t hurt in this field, and you
take advantage of them when you can, and I was very lucky. So in any event they
went through this and they asked me if I would run the job, and I agreed. I had
to figure out what we were going to go. And it was the day after Thanksgiving,
and the technical proposal was due before the end of the year -- I think before
Christmas -- and the financial proposal was due before New Year’s Day, so we
didn’t have a whole lot of time. And they had these two teams, and they said,
“What do you want?” And I said, “I want to meet with the marketing team
tomorrow in Washington.”

So Frank Cary said,
“Okay, we’ll set that up.” And then I said, “I want to meet with the
development team Sunday in Poughkeepsie.”
George Kennard said, “Okay, we’ll set that up.” So they did, and I went down to
meet with the marketing guys and find out what they really had to have, but I
wanted to go there first. And so I really got to know what the heck they were
talking about and why and they’d come up with a pretty impressive story. It was
a multiprocessing system just like the ones we designed at Sylvania. They were having a big battle with
the development folks because they said you couldn’t build such a system and
you couldn’t program it if you did, and so I knew they were part way wrong
anyway.

So I went up to Poughkeepsie Sunday and
discovered that they had a real distributed crowd of people all over the place.
I was introduced as the boss in both places immediately, and one the things
that Learson, by the way, told the two division
presidents, he said, “For purposes of this proposal you report to Watts.” So I was reporting to Learson,
and I had the two division presidents working for me. So I was given carte blanche, and I thought it was wild
and I might as well use it. So I talked to the engineering manager who was
putting the proposal together and engineering it, and they were trying to build
it out of what was going to be the Mod 50 360 machine the following April and
the Mod 50 turned out to be far ahead of the other 360 machines.So in any event they used the Mod 50 as the
base for building the FAA machine, but they had not put together the
multiprocessing the FAA wanted. The fail soft multiprocessing had to be a
polymorphic system. There must have been half a dozen people bidding for this
thing and I’d gotten the whole story of competition. It was the number one
proposal, the biggest bid IBM had ever submitted at this point.

Booch: What dollar amount were we
talking about back then?

Humphrey: $100 million.

Booch: Wow, that’s a lot of money even
today.

Humphrey: It was then. But I
told the engineering guy, “We’ve got to get this team together. We can’t do
this unless we get the marketing guys here, too.” So they all
agreed, and I said, “Where we going to do it?” And they didn’t have any
room at all, and the engineering guy said, “Well, I belong to a volunteer fire
department out in Red Oaks Mill and they have a big dance hall there. Maybe we
could rent that?” I said, “Let’s do it.” So he called and rented the dance
hall. It had a piano in the corner. It was just a big room. And I got a hold of
the marketing guys and I said, “We’re all showing up there, like, ASAP.” So in
about two days we got in there. We had furniture. We had tables set up. There
was a blackboard we could slide into the middle. We had about 50 people. Even
had the financial people come in and work with us.

Booch: With the piano, did you start
off by singing the IBM company song, which I think existed back then?

Humphrey: No. Every so often
somebody would go banging something on the piano. It was marvelous fun. I’d
pull the blackboard in the middle of the room and bang on it. I said,
“Meeting.” I told them what the meeting was. Anybody who wanted would come and
so our first issue was we had to agree on a strategy and exactly how we were going
to design the system. So I went through that. It took a little while. We
hammered it out and decided because I’d gone through this stuff, could you build
the hardware or not. I said, “First of all, this contract is not for
programming. We are building the machine, and here’s the kind of machine they
want and if we don’t build that machine, we’re not going to win.”

And so the guys
finally bought that, even though the VP of engineering over the engineering
guys, Bob Evans, absolutely disagreed with the design approach. He said, “You
can never get it to work.” You couldn’t program it, and that sort of thing. So
in any event I overrode that and so we went ahead and put together the
proposal. As part of the proposal the Lincoln Lab had put together a set of
four programs that you were supposed to take. Whatever your final proposal was,
you had to write those four programs and come up with eight numbers. The
numbers were the size of the program in bytes that it would take to store and
the time it would take to execute for each of the four programs. That was eight
numbers and the marketing guys had put together, with the 360 instruction set,
the answers and they’d gotten their best system’s engineers to do it and they’d
put the whole thing to together and they had eight numbers.

So I took the
programs and the numbers and the specs over to see Gene Amdahl who was then the
head of architecture for [System] 360 and I explained the problem to Gene. I
said, “Gene, these are $100 million numbers,” because it was, like, a Thursday
or a Friday. I said, “Could you just have your folks take a look at this and
see if these guys have done a good enough job?” And he said, “Okay. When do you
need it?” I said, “I need it, like, yesterday.” He said, “Okay.” So that
weekend he and his two top architects re-did the programs and took 40% off the
time and size. Boy, that was a $100 million weekend.

Booch: So if I may ask, do you remember
the nature of those four programs you were being benchmarked against? What were
they exactly?

Humphrey: I do not know, but
they were something that Lincoln Labs had worked out. This will tell you how
good a system this can be to do air traffic control. I’m sure it was basically
air traffic calculations -- the intercepts and all the kind of stuff you’re
after to run an air traffic control network of the type we were building. So in
any event, we did get the proposal in. It was a hassle. It was printed on, I
think, Christmas Eve and we had to go down to the printers and boy, we had
everybody volunteering to go down to the printers.

They wouldn’t let me
go. They said, “We’ll go do it, Watts.” So
they did and we got the proposal out, got it in on time, but we didn’t have the
pricing, and then we put together the pricing. Well, it turns out they’d done
some fancy work with some of the memory stuff because we had standard memories
and then they had a bulk memory that IBM was also offering. So our original
proposal was with bulk memory, and so we priced it with the bulk memory but
they had standard memories also, and the system could be multiprocessed.
You got the four processors. You got the eight memories, a bunch of channels,
and everything could communicate with anything and anything could fail. And, of
course, we had all of these interlocks between them that were programmable so
you could actually tell status and pass control and that sort of thing, so we
had all that stuff in that we had designed before and I had some marvelous
people working on this. They were really very, very talented.

FAA Bid Pricing

The architects were
working with us as well, so we had a really very, very, very good technical
crew. So we got the proposal together and submitted it and when we put the
price proposal together and submitted that, the FAA took a look at it. I
remember having a meeting with Tom Watson and Vin Learson.
Vin Learson, when I’d been given the job said, “If we
have to bid it at $1.00, we’re going to win this contract.”

Booch: And if I remember your pricing
came in a little bit higher than $1.00.

Humphrey: Well, I was, kind
of, surprised when I arrived at the pricing meeting in Armonk with Vin Learson and Tom Watson and a bunch of folk… and it was a
pricing meeting. They laid out what the costs were and all that sort of thing,
and so we went through all of that. The top financial guy, Hillary Faw, a marvelous guy, he was there. He described all that
stuff and we went through and put together the price. We proposed what it was
going to be and the marketing guys were driving for low number. They wanted to
come in under $70 million, because they said, “That’s where the best
competitor’s going to be. We have got to do that.” And that wasn’t profitable. And
so it got around to Vin Learson who was a senior VP
over marketing and development at this point. Vin was
a big guy. Remember, he was my boss. And so Tom turned to Vin
and said, “Vin, where do you think we ought to price it?” He said, “$100
million.” I thought, “Oops.” Way more than the marketing guys were thinking. He
said, “That’s what it’s worth.” He said, “This is a
marvelous system. It’ll do the job for them, that’s what it’s
worth.” So actually they priced a little bit over $100 million, and that’s what
they submitted.

And so the FAA went
through that, and they came back and because of the pricing, the bulk memories
turned out to be most of the memory in the system, but the way that we priced
everything (which had been, kind of, you know, done quietly by the financial
community and they didn’t tell people what they were going to do) it turned out
that the memories in the computers themselves were priced much lower and that if
the FAA ended up replacing the bulk memories with more basic memories it’d
actually save money, several million dollars. And so they did. So the bid came
in right under $100 million and the FAA accepted our proposal. Even though we
were the highest-priced bid they took it. Well, the team we had together, this
50 person team, they were amazing. While they were all at loggerheads before
this, they were all together and we kept them all there.

They were all
involved. We knew what we were doing and the whole idea of building a coherent team, everyone knew what we were doing. Tom Watson never
arrived there, but Vin showed up for several meetings..
He’d come in and I’d bang on the screen and introduce him, and so Vin would
talk to the group, and so we’d have a daily meeting with everybody, and something
would happen and there would be this excitement. They’d bang something on the
piano and then they’d go announce it.

Booch: Oh, you were still in the dancehall
during this time. You rented it for a long time.

Humphrey: We were at the
dancehall through New Years, and they said that dancehall really paid for
itself.

Booch: I’d say so. That’s certainly not
a piece of IBM history I knew about.

Humphrey: No. But I mean, we had an integrated group. It was just so enthusiastic,
and the excitement when we got that thing in was amazing. But I remember a
meeting right after the win. There was another meeting called with Tom Watson
with me and Learson and Ralph Pfeiffer and all the
top marketing people. Frank Cary was there and the financial people,
and they wanted to know how the FAA had been able to snooker us by getting the
price down. And so Tom was really mad and he, kind of, looked around the room
and he said, “Now, who’s responsible for that?” Dead silence. But finally I
said, “Oh, Tom, I probably am. I was proposal manager.” He said, “Well, what
happened?” So I explained it to him about the pricing and how it had happened,
and I said it was, in fact, a surprise that that’s what happened. And he said,
“Okay,” and so that was the end of it, but I was surprised. In that whole room
not a soul would step up and say, “Well, no, I was responsible.” But I figured
I’d better. And in a way I was, because I -- Hillary Faw
later told me, he said, “You could have known all of that.” I said, “Quite
frankly, you were pretty busy.” So I didn’t really understand it, but that’s
what happened. So we won that, and shortly later they had a re-organization and
Bob Evans, the VP, was pulled from his job. He was the guy that I’d had these
battles with, but he’d been involved in this whole thing. He knew what was
going on and he was put in charge of the Federal Systems Division, which was
also reorganized at that point. So Bob became division president of FSD.

Booch: And this would have been what
year? This would have been ’65 I think?

Humphrey: I think it was’64. Well,
the [System] 360 was announced in April. I think shortly after they had the
reorganization because they’d rearranged the whole division structure. They put
one guy in charge of all development, and then they had marketing and
manufacturing pulled out of the separate units. It was all rearranged and Learson still had development and manufacturing. Marketing
was under Dick Watson, Jr., Tom Watson’s younger brother. Frank Cary was
development group manager. He had stuff under him including a systems
development division and systems development had the whole 360 and everything. So
they’d gotten 360 announced, and there’s a story there, too, but let me finish
this first and come to that. The Federal Systems Division was later asked to
bid on the programming for the FAA system. Remember, “Bo” [Bob] Evans was the
guy as division president now at FSD who said you couldn’t program this thing. So
his division put in the proposal to program the FAA system and they won it. And
so Bob’s team actually programmed the FAA air traffic control network, the en
route air traffic control network which is used to this day.

Booch: Wow, well, as a frequent flyer I
feel happy that you were involved with that.

Humphrey: Boy, it is the
system. It was delivered and it’s been enhanced and upgraded and all kinds of
stuff but it’s been working. That design has been working ever since.

Booch: Now, this was all still in
assembly language, correct? Because I know FORTRAN was on the scene back then
but that really wasn’t being used, was it?

Humphrey: No. No, that isn’t
quite right, because part of our bid -- the one programming thing we had to
deliver -- they had some utilities and stuff where we had to deliver a JOVIAL
compiler.

Booch: JOVIAL, of course, wow.

Humphrey: A JOVIAL was behind
that thing, and so that was in it. I’m sure they moved to C and C++ and
everything since but in any event that was in it.

Booch: Did IBM actually build that
compiler?

Humphrey: No, it was
contracted out. It was part of our bid. We had a contract to do it. I don’t
have any recollection but we got a JOVIAL. We were able to buy one essentially,
modified to run on the 360.

Booch: Got it.

Humphrey: So that was amazing.
So Bob Evans at FSD actually did the programming, and they did a marvelous job.
It worked fine as we knew it would.